Net Income Per Share

6 Months Ended

Jun. 30, 2022

Disclosure Text Block

Net Income Per Share

3. Net Income Per Share

The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net income	$	37,080	$	391,303	$	75,881	$	431,229
Add back interest expense, net of tax benefit, on assumed conversion of 2024 Convertible Notes		445		—		889		—
Add back interest expense, net of tax benefit, on assumed conversion of 2026 Convertible Notes		667		—		1,333		—
Numerator used in computing net income per share — diluted		38,192		391,303		78,103		431,229
Denominator:
Weighted average number of common shares outstanding used in computing net income per share — basic		153,304		161,948		155,550		161,460
Effect of dilutive securities:
Stock options		361		417		339		348
Time-based restricted stock units		922		928		1,211		1,121
Performance-based restricted stock units		270		70		188		71
Restricted stock		151		132		159		134
2024 Convertible Notes assumed conversion		14,934		—		14,934		—
2026 Convertible Notes assumed conversion		14,934		—		14,934		—
Dilutive potential common shares
Weighted average number of common shares outstanding used in computing net income per share — diluted		184,876		163,495		187,315		163,134
Net income per share — basic	$	0.24	$	2.42	$	0.49	$	2.67
Net income per share — diluted	$	0.21	$	2.39	$	0.42	$	2.64

The outstanding securities have been excluded from the computation of diluted weighted average shares outstanding, as applicable, as their effect would be anti-dilutive (in thousands):

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2022	2021	2022	2021
Stock options	5,035	9,430	6,204	10,007
Restricted stock awards	—	—	—	36
Time-based restricted stock units	98	84	49	53
Performance-based restricted stock units	528	619	510	330
Note Hedge Warrants	8,318	8,318	8,318	8,318
2022 Convertible Notes	—	8,318	—	8,318
2024 Convertible Notes	—	14,934	—	14,934
2026 Convertible Notes	—	14,934	—	14,934
Total	13,979	56,637	15,081	56,930

Prior to the adoption of ASU 2020-06, the potentially dilutive impact of the 2022 Convertible Notes, 2024 Convertible Notes and 2026 Convertible notes (together, the “Convertible Senior Notes”) (Note 8) was determined using the treasury stock method. Under this method, no numerator or denominator adjustments arose from the principal and interest components of the Convertible Senior Notes because the Company had the intent and ability to settle the Convertible Senior Notes’ principal and interest in cash. Instead, the Company was required to increase the diluted net income per share denominator by the variable number of shares that would be issued upon conversion if it settled the conversion spread obligation with shares. For diluted net income per share purposes, the conversion spread obligation was calculated based on whether the average market price of the Company’s Class A Common Stock during the reporting period was in excess of the conversion price of the Convertible Senior Notes. There was no calculated spread added to the denominator for the three and six months ended June 30, 2021.

Following the adoption of ASU 2020-06 on January 1, 2022, the dilutive impact of the Convertible Senior Notes is determined using the if-converted method. Under the if-converted method, the Convertible Senior Notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Interest charges are deducted from the numerator, unless the principal amount of the convertible instruments is required to be paid in cash.

There was no dilutive impact of the 2022 Convertible Notes for the three and six months ended June 30, 2022 because the Company had elected prior to the beginning of the period to settle the conversion of 2022 Convertible Notes, if any, with a combination settlement of a cash payment equal to the principal value of converted notes and shares of Class A Common Stock equal to the conversion value in excess of the principal value, if any. Accordingly, interest expense was not removed from the numerator and there was no calculated spread added to the denominator because the average market price of the Company’s Class A common stock during each period was not in excess of the conversion price.